Council’s Finance Committee Holds Mayor’s Tobacco Regs

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For more than three hours, aldermen from a broad spectrum of backgrounds pushed back against Mayor Rahm Emanuel’s proposed tobacco regulations that would increase the city’s smoking age to 21 and generate $6 million in new revenue from increased taxes on tobacco products. Committee Finance Chairman Ed Burkeeventually decided to hold the item for further consideration.

At the end of yesterday’s meeting, Burke called a new meeting on Wednesday at 9:15 a.m. to reconsider the item.

Yesterday’s Finance Committee meeting started with a full press gallery, likely in anticipation of a debate on a resolution urging the city to quickly settle the a lawsuit filed by Bettie Ruth Jones, the woman accidentally killed by the Chicago police officer responding to the Quintonio Legrier call, but a section of the gallery emptied out moments after the meeting was called to order when Chairman Burke (14) announced that he and resolution sponsor Ald. Jason Ervin (28) agreed to hold the resolution and submit it to a subcommittee to fix the “verbiage.”

Tobacco Tax Debate

Expressing worry that the increased taxes would kill small businesses, especially those located in border wards, and fuel the underground market of loose cigarette sales, aldermen argued the new regulations would cause more harm than good during three hours of debate.

While the revenue generated by the new tax would fund a new orientation program for CPS freshmen smoking cessation programs, some aldermen argued the enforcement mechanism is unclear; a few questioned whether the Department of Business Affairs and Consumer Protection (BACP) or the city’s police department would take over the reins to enforce the new rules.

Although Chicago’s cigarette tax is already the highest in the nation, PublicHealth Commissioner Julie Morita, M.D. says raising the tobacco age would to curb youth smoking at a key time when their brains are still developing. Smokers who start at a younger age will have a harder time quitting as they get older, she said. Young consumers are also more price sensitive.

But Ald. Leslie Hairston (5) rejected that premise, pointing to the thousands of young adults who buy expensive concert tickets, cell phones, and designer clothing and shoes. “It seems like we are a city that wants to chase people away,” she said, garnering cheers from the gallery.

South Side Ald. Roderick Sawyer (6) says he knows one man who makes $800 a day selling loose cigarettes. He gave voice to concerns that the new taxes would hurt “communities of color”. Ald. Jason Ervin (28) recalled a constituent who used to sell loose cigarettes out in the “freezing cold” but now sells those cigarettes “from the luxury of a brand new Jeep.”

When Commissioner Morita suggested aldermen were raising “theoretical” concerns about black market sales, Ald. Ervin shot back, “I would implore you to walk down Madison with me, from Hamlin all the way to Kosner, and you will see the real consequences of what we’re talking about. This is not theoretical. This is not something I dreamed up,” he added.

Apologizing and saying she misspoke when dismissing Ervin’s comments, Morita tried to shift the conversation back to the public health benefits of the ordinance.

But few aldermen were interested in talking about health. While they agreed curbing youth smoking is admirable, they said they couldn’t understand why the city felt the need to target small business owners who, in some cases, could see up to a 50% reduction in sales.

Several aldermen asked to hear how CPS plans to spend the $6 million in potential new revenue. The Mayor’s office has said it would be earmarked for a new week-long orientation program for students entering their freshman year of high school. Finding it odd that the new taxes are aimed at curbing smoking, which theoretically would lead to a reduction in year-over-year revenue, Ald. Patrick Daley Thompson (11) asked how the summer program could continue when the annual revenue isn’t guaranteed. Morita said she didn’t have an answer.

Even former Ald. James Balcer (11) showed up to testify against the ordinance. Balcer, who is a veteran, said vets and active military personnel should be exempt from the age restrictions, because, as he put it, if they are old enough to fight for their country and vote, they are old enough to smoke.

As the hearing approached the three hour mark, Ald. Ameya Pawar (47), who is not a member of the committee, but is one of the ordinance’s lead sponsors, had had enough and accused his colleagues of backing big tobacco.

“I’m at a loss, we have progressives saying they’re for tobacco. I don’t know what is going on when we have people carrying the water of tobacco companies,” he opined. Taking his comments a step further, Ald. Pawar said yesterday’s focus on the economic impact of tobacco sales was akin to colonial times, when during the British occupation of India, the British used to give out free cigarettes as a way “to get them hooked so they could pay for them later.”

The dividing issue of public health versus business interest carried over into the public portion of the meeting. Representatives from the American Heart Association and area hospitals lined up to support the ordinance for its health benefits.

Representatives from the Illinois Retail Merchants Association, 7-Eleven, Jewel Osco, and two South Side pastors testified against the ordinance, citing the economic burden they’d face and the potential legal issues the city would open itself up to if it approved the changes.

According to Tanya Triche, vice president and general counsel of the Illinois Retail Merchants Association (IRMA), Chicago has no jurisdiction to impose a new tax because the state legislature ended that authority in the early 1990s. Should the industry take legal action on this package, the recent taxes the City Council approved on vaping products could be folded into the lawsuit. “These are very murky legal waters,” she warned.

Committee Approves $3M+ In Police-Related Legal Settlements

The handful of aldermen who remained in the Council chambers following the heated debate on tobacco approved about $3.5 million in legal settlements lodged against the city’s police department. All three settlements were approved together by voice vote following testimony on each item from Jane Notz with the City’s Law Department.

The biggest amount, $3.1 million, settles a Department of Justice suit against a hiring practice no longer in effect that required ten-years continuous residency in the U.S. for all police candidates. Ald. Nick Sposato (38), a former firefighter, cast the sole “no” vote, arguing the department’s residency requirement was warranted. “I’m so troubled by this. I don’t think this is something I can support. I think we did everything right… We need a history, we need to know what these people were like.”

The suit alleges that between 2006 and 2011 the police department engaged in “national origin discrimination,” blocking 47 police candidates a spot on the force because they failed the residency requirement, said Notz.

“The requirement was designed to ensure that applicants had sufficient contacts in the United States for the department to conduct an adequate background check,” she explained. However, Title VII of the federal Civil Rights Act makes it illegal to discriminate against an employee because of his or her national origin, leading the federal Equal Employment Opportunity Commission (EEOC) to find the police department at fault. The department revised the policy to five years in August 2011. The new policy is not considered discriminatory, since only two candidates were turned down, Notz said.

A number of factors contributed to the $3.1 million figure. Under the settlement, the department has agreed to hire up to eight of the 47 applicants who were denied a spot on the police force. Each of the new hires will be eligible to receive retroactive retirement benefits (about $1 million). The city will also pay approximately $2 million in backpay damages and a $10,000 award to each of the two original plaintiffs, “in recognition of their assistance to the DOJ and EEOC.”

If the case had made it to court, Notz explained, the city could have been forced to pay out additional benefits to the denied police candidates and a court order could have forced the department to hire more than eight candidates.

The other two legal settlements the committee approved stem from allegations of police misconduct, or more specifically, illegal searches and seizures. Both had a smaller price tag: $200,000 and $220,000.

Ald. Jason Ervin (28) and Ald. Michael Scott, Jr. (24) directly introduced an ordinance into committee that would remove JP Morgan from the list of banks that can hold the city’s money in response to the bank closing a branch at 4114 W. Madison St. in East Garfield Park. It’s the only bank or ATM in the community, Ald. Ervin explained. Chairman Burke held the matter to give Ald. Ervin time to work the issue out with the bank and said it could be heard at the next meeting if no movement has been made.

McPier Building Permit Fee Waiver

Once-controversial building permit fee waivers for McPier that Chairman Burke held in committee after aldermen cried foul were brought up at the very end of the meeting, after the miscellaneous portion. Mike Merchant with the Metropolitan Pier and Exposition Authority testified for less than five minutes and it was quickly approved by the handful of aldermen that remained.

Back in January, after nearly 40 minutes of debate, Chairman Burke held two proposals that would have waived building and permit fees for the Metropolitan Pier and Exposition Authority, as well as a proposal that would authorize $7 million in TIF funds to pay for a new public park next to the Marriott Marquis Hotel currently being built. Some aldermen complained the city shouldn’t be subsidizing private development.

But those in opposition were long gone by then. Ald. Pat Dowell’s (3) ordinance, if approved Wednesday, will save McPier roughly $2.6 million in construction fees associated with the McCormick Place expansion plan through 2017.